Panama
The only country where the US dollar is legal tender, Panama combines tropical living with first-world banking infrastructure. Its famous Pensionado program offers the world’s best retiree discounts, and the Friendly Nations Visa makes immigration straightforward for Americans.
Central AmericaPros
- The US dollar is legal tender (the Balboa is pegged 1:1), eliminating all currency exchange risk and simplifying finances
- The Pensionado retiree visa offers the world’s best senior discounts including 50% off entertainment, 25% off airline tickets, and 25% off restaurants
- Territorial tax system means only income earned within Panama is taxed; foreign-sourced income is completely tax-free
- The Friendly Nations Visa provides a fast-track to residency specifically for US citizens and nationals of 50 other approved countries
Cons
- Humidity is intense and relentless year-round in lowland areas, with temperatures rarely dropping below 25°C even at night
- Cultural and entertainment options are limited outside Panama City; smaller towns like Boquete are quiet and slow-paced
- Income inequality is very visible, with modern skyscrapers standing alongside impoverished neighborhoods in Panama City
- Panama is built around car culture with limited pedestrian infrastructure, making walking impractical in most areas
Cost of Living
Monthly estimates in USD for a single person. All figures are approximate.
| Expense | Panama | US Average | Savings |
|---|---|---|---|
| Rent (1BR, city center) | $1,000 | $1,800 | $800 |
| Rent (1BR, outside center) | $600 | $1,200 | $600 |
| Groceries | $300 | $400 | $100 |
| Dining out | $200 | $300 | $100 |
| Transportation | $40 | $200 | $160 |
| Internet | $40 | $70 | $30 |
| Healthcare | $80 | $450 | $370 |
| Total | $2,260 | $4,420 | $2,160/mo |
Visa Options for Americans
Pensionado Visa
Remote work OK Family eligiblePanama’s world-famous retiree visa offers permanent residency to anyone with a pension of at least $1,000/month. Holders receive extraordinary discounts on everything from flights and hotels to restaurants and medical services.
- Cost
- $1,150 USD
- Processing time
- 3–6 months
- Duration
- Permanent
- Path to residency
- Yes
- Path to citizenship
- Yes
- Family
- Spouse receives the same Pensionado benefits and discounts. Dependent children under 18 can also be included.
Tips
- Pensionado discounts are extraordinary: 50% off entertainment and movies, 25% off airline tickets, 25% off restaurants, 15% off hospital bills, and more
- Social Security income qualifies as the pension source, as do private pensions and annuities paying $1,000+ per month
- This is a permanent visa from day one, unlike most countries that require years of temporary residency first
Official source · Last verified August 2026
Friendly Nations Visa
Remote work OK Family eligibleDesigned specifically for citizens of 50 “friendly nations” including the United States. Requires establishing an economic or professional tie to Panama and making a $200,000 fixed-term bank deposit (minimum 3 years). Leads to permanent residency after 2 years.
- Cost
- $1,050 USD
- Processing time
- 3–6 months
- Duration
- 2 years, then permanent
- Path to residency
- Yes
- Path to citizenship
- Yes
- Family
- Spouse and dependent children can be included in the application as beneficiaries.
Tips
- The economic tie can be a job offer, business ownership, or real estate purchase in Panama; even a small property qualifies
- You must deposit at least $200,000 in a Panamanian fixed-term bank account (minimum 3 years), or invest $200,000 in real estate, or provide proof of employment in Panama
- After 2 years of temporary residency, you automatically qualify for permanent residency and can apply for citizenship after 5 years total
Official source · Last verified August 2026
Digital Nomad Visa
Remote work OK Family eligiblePanama’s Short Stay Visa for Remote Workers allows digital nomads earning at least $3,000/month to live in Panama for 9 months with the option to extend to 18 months. Foreign-sourced income remains tax-free under the territorial system.
- Cost
- $300 USD
- Processing time
- 1–2 months
- Duration
- 9 months, renewable to 18 months
- Family
- Dependents can apply to accompany the primary applicant with proof of additional income.
Tips
- You must prove at least $3,000/month in income from a company or clients based outside Panama
- The visa is initially for 9 months but can be extended once for an additional 9 months (18 months total)
- Consider transitioning to a Friendly Nations Visa if you want to stay permanently, as the Digital Nomad Visa does not lead to residency
Official source · Last verified August 2026
Qualified Investor Visa
Remote work OK Family eligibleGrants permanent residency to those who invest $300,000 or more in Panamanian real estate, a business, or government securities. This is the most direct path to permanent residency for those with significant capital to deploy.
- Cost
- $10,000 USD
- Processing time
- 3–6 months
- Duration
- Permanent
- Path to residency
- Yes
- Path to citizenship
- Yes
- Family
- Spouse and dependent children can be included as beneficiaries in the investor visa application.
Tips
- The minimum $300,000 investment can be in real estate, a Panama-based business, or Panamanian government securities
- Real estate in Panama City, particularly in areas like Costa del Este and Punta Pacifica, is the most popular investment route
- This grants permanent residency immediately, skipping the temporary residency phase entirely
Official source · Last verified August 2026
Healthcare
- System type
- Hybrid
- Quality rating
- 3/5
- GP visit
- $30
- ER visit
- $80
- Dental cleaning
- $35
- English-speaking doctors
- Common in Panama City
You'll need health insurance as an expat. SafetyWing is popular with American expats — plans start around $45/month.
Tax Implications
- US tax treaty
- No
- Local income tax
- 0%–25% (territorial system)
As a US citizen, you'll still file US taxes from abroad. The Foreign Earned Income Exclusion (FEIE) lets you exclude up to ~$130,000 (2025 tax year) of foreign earned income. Without a tax treaty, you'll need to be more careful about double taxation.
This is not tax advice. Consult a tax professional who specializes in expat taxation.
Filing US taxes from abroad? MyExpatTaxes is built specifically for Americans overseas, or use Greenback Expat Tax Services if you want a CPA to handle everything.
American Expat Community
Estimated American expats: 25,000+ Americans
Key cities: Panama City, Boquete, Coronado, Bocas del Toro
Expat Resources
Planning your move to Panama?
Spend a month in Panama first. Find a short-term rental on Airbnb or book a longer hotel stay on Booking.com.
You'll need to transfer funds internationally. Wise offers the best exchange rates with low transparent fees.
You still owe Uncle Sam from abroad. MyExpatTaxes (DIY) or Greenback (full-service CPA) specialize in American expats.
A VPN keeps your US streaming services working abroad.
Need legal help with your move to Panama?
Tell us what you need and we'll connect you with the right attorney — whether that's someone in Panama for visa and residency paperwork, or a US-based expat specialist for tax and asset planning.
Free, no obligation. We'll reach out within a few business days.